CHAMBERSBURG -- Edge Rubber is selling its plant at 811 Progress Ave. and other assets to a startup rubber recycling company.

Bankruptcy court on May 11 approved the sale of Edge Rubber’s real estate, truck trailers and personal and intellectual property for $4.1 million to EFG America LLC of Mesa, Arizona. Settlement has been extended to July 7.

“While we are in the process of closing on the acquisition, I am not at liberty to share information,” said Don Carroll, EFG America vice president of investor relations.

EFG is using a process for “devulcanizing” rubber powder so it can be recycled into vehicle tires and other products, according to the company's website. Significant amounts of EFG’s “Black Masterbatch” can be added to virgin material for making rubber products at lower cost.

The company is building a production plant in Bay City, Texas, and plans to build more, according to online accounts from CEO Elroy Fimrite.

“It is my understanding that the group does intend to operate the (local) facilities,” said L. Michael Ross, president of the Franklin County Area Development Corp. “They do intend to restore operations. We are hopeful for clarity and direction” after the settlement.

Edge Rubber had employed more than 50 people making rubber powders from crumbs of old tires for use in making ties, hoses, coatings and brake pads.

Edge Rubber, known as Edge Pennsylvania and formerly Blackacre Properties LLC, sought to reorganize in November under bankruptcy court protection. U.S. Bankruptcy Court, Pennsylvania Middle District, approved the plan, but the company ceased operations in May.

“Unfortunately they were not able to sustain themselves under the reorganization plan,” Ross said.

In its initial filing for Chapter 11 bankruptcy, Edge Rubber listed $8 million in debts -- $6 million of secured debt to Branch Banking and Trust Co., based in Winston-Salem, N.C., and $2 million owed to about 20 unsecured creditors.

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A padlock keeps visitors out onFriday, July 1, 2016 at Edge Rubber, Chambersburg. The company has sold its assets, including its plant at 811 Progress Avenue,(Photo: Markell DeLoatch/Public Opinion)

FCADC in 2012 began renting 1711 Opportunity Ave. in the Cumberland Valley Business Park to Edge Rubber for an expansion. The company had threatened to move to Tennessee, and the state came up with a $2.5 million loan for equipment that promised to save 50 jobs and to add another 60 by 2016.

Four companies bid for some or all of the company’s assets – EFG, Anzu Industrial Products, Cincinnati Industrial Auctioneers and Chambersburg Waste Paper Company. The court considered EFG’s bids to be the best -- $1.21 million for 811 Progress Ave., $2.59 million for personal property, $100,000 for vehicles and $200,000 for intellectual property.

Edge Rubber, founded in 2003, grew out of Baker Rubber, a company establishing on Progress Avenue in 1987.

Vulcanizing rubber gives it its strength, but also makes used rubber difficult to recycle. EFG is introducing to North America from China a 20-year-old proprietary method for severing the bond between sulfur and the hydrocarbon at a low (176-degree) temperature, according to the company’s demonstration videos. The method has no emissions. The product then can be re-vulcanized in a new product by adding sulfur.